Larding the Cliff Talks with More Taxes

State highway officials are using the budget negotiations in Washington to push an increase in the 18.4-cent-a-gallon federal gasoline tax – one of a handful of proposals various interest groups are seeking to pack into a deficit reduction deal.

The federal gas tax has been raised before as part of a deficit-reduction package, most recently in 1990 and 1993. Not surprisingly, the tax faces overwhelming public opposition. But supporters of it see a deficit reduction deal as a once-in-a-generation-chance to pass the tax increase that finances highway construction and maintenance.

Other tax measures loosely thrown into the budget talks include a carbon tax, which was proposed by Rep. Jim McDermott, D-WA, and a junk food tax, floated by Larry Summers, President Obama’s former chief economist.

Baucus said in an interview with the Great Falls Tribune that he wants to keep the Bush-era rate for estate taxes in order to protect ranchers and farmers who pass their properties on to their children. The estate tax reduction currently exempts the first $5 million of an estate’s value for individuals and taxes the remainder at 35 percent.

However, without action from Congress by the end of the year, only the first $1 million of an estate’s value will be exempt from taxes, with the remainder taxed at 55 percent.

NORQUIST SHRUGS OFF DEFECTORS Conservative activist Grover Norquist disregarded talk of a dissolving anti-tax sentiment in Washington after three senior Republican congressmen distanced themselves from his anti-tax pledge over the weekend.

Sens. Saxby Chambliss, R-GA, Lindsey Graham, R-SC, and Rep. Peter King, R-NY, have all said they would break Norquist’s anti-tax pledge to reach a deal that reforms entitlements and avoids the fiscal cliff.

But Norquist told CNN that the lawmakers were simply “discussing impure thoughts on national television,” adding that “no Republican has voted for a tax increase.”

Norquist quipped that the congressmen had all mused about higher taxes in the past, and had failed to attract a following within the GOP. The current crisis, he argued, would be no different. “They all said that two years ago when we were arguing over the debt ceiling limit,” Norquist said. “And during the debt ceiling, we cut spending, we didn’t raise taxes.”